Payday lender CFO Lending is raiding my account

The payday lending industry has been referred to the Competiiton Commission. Photograph: Dan Kitwood/Getty Images

Can you please help get back the £72 taken from my account by a payday loan company, CFO Lending, without my authority?

Back in May I paid off in full a friend's loan as he was getting into difficulties due to the incredibly high rates the firm charges. At the time I advised CFO that this was a full and final settlement, which it confirmed.

However, a few weeks later it deducted another payment, £72, from my account. It appears my friend had another loan on a totally new transaction, but rather than deducting it from his account, CFO took it from mine.

I contacted my bank, which advised me I would need to contact CFO. Eventually I spoke to someone there, which was no mean feat. I was told I needed to resupply my bank details so it could refund the amount – but I am very worried about giving this company any details.

CFO made no apology and told me it could not explain what had happened due to the data protection act. I suggested it should refund me on the same basis as it charges interest – £25.92 per £72 borrowed a month, for a total of £97.92. CFO refused, but I am still no nearer to getting back my £72. AD, Southampton

Last month the Office of Fair Trading referred the payday lending industry to the Competition Commission for investigation, and your letter goes some way to explaining why. There has long been a feeling among debt charities that some payday lenders, which offer short-term loans at more than 4,000% APR, are out of control.

Tales of lenders raiding accounts in this way are all too common, although it is normally – but not exclusively – from the account of the person who took out the loan.

We asked CFO to explain what had happened in your case, and initially we got the same treatment as you – no response. Eventually, Daniel Bishop, manager at CFO's Leytonstone office, emailed to say that if you contact him directly he will be able to discuss your refund, minus the extra interest, presumably.

We suspect you have fallen foul of a continuous payment authority, often used by payday lenders. These give firms the right to take recurring payments – a controversial method often used by magazine subscriptions, AA cover and the like.

The Financial Conduct Authority recently warned banks they must cancel these at a consumer's request. Too often, banks have told customers that these payments can only be cancelled by the firm setting them up, which is not the case.

Anyone who lost out as a result of a bank failing to cancel a continuous payment can reclaim the money, dating back to November 2009.

We welcome letters but cannot answer individually. Email us at consumer.champions@theguardian.com or write to Consumer Champions, Money, the Guardian, 90 York Way, London N1 9GU. Please include a daytime phone number